Source: AFP
Long marginalized by the banking industry, Mexico’s neighborhood tortilla makers are cautiously embracing financial technology in a country where cash is still king for many.
The National Tortilla Council and technology company Finsus have developed a mobile app that allows food staple vendors to charge customers using cards, QR codes or a mobile phone number.
“It’s revolutionizing the industry,” said the organization’s president, Homero Lopez Garcia, whose ambitious goal is to have 90 percent of tortilla makers using the app within three years.
Feedback from those who have tried it has been positive: “They say, ‘I like it, I get it,'” he said.
The hope is that the app will also allow tortilla makers to generate additional income by offering mobile phone top-up and bill payment services to their customers.
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For many, the app is their first link to the formal financial industry.
Only about half of Mexico’s 129 million residents have a bank account, and most tortilla shops operate informally.
Source: AFP
Although still in the testing phase, the app is already making the life of tortilla maker Abel Garcia, who has been in the business for 25 years.
The 60-year-old said he started using family savings after failing to get a bank loan and now owns several shops.
“It was hard to get credit — very, very hard!” said Garcia, in the working class neighborhood of Iztapalapa.
His success eventually gave him access to banks, but with restrictions that prevented him from using them.
“That’s why we tore up the checkbook,” he said.
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Informal economy
Tortillas are consumed by millions of Mexicans every day, and an estimated 110,000-135,000 businesses are involved in their production, according to official and industry figures.
Most of them operate in the informal economy, as do many Mexican workers.
Mexico City, for example, is home to about 18,000 tortilla shops, according to the national statistics institute INEGI.
But only about 10 percent of them are legally registered, City Hall figures show.
Without access to the formal financial system, many of them prefer to transact in cash.
Source: AFP
A 2021 survey by banking regulator CNBV found that 64 percent of Mexicans preferred notes and coins to debit or credit cards.
Maria Adelaida Francisco, who works at a tortilla shop in Mexico City, had never used a financial app until her boss Jorge Ramirez suggested she try the new one.
Now the 40-year-old uses it to pay her electricity bill, she said.
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Some tortilla producers avoid banks for fear of red tape or debt.
“They’re a little afraid of the tax issue or they don’t know about it,” Ramirez, 35, said.
Several of his eight employees now use the app to collect their paychecks.
The change reflects a wider embrace of financial technology in Latin America’s second-largest economy.
According to a study by the Inter-American Development Bank and venture capital firm Finnovista, Mexico is home to 20% of the region’s fintech businesses, second only to Brazil.
The number of fintech startups in Latin America and the Caribbean more than quadrupled between 2017 and 2023, to 3,069 in 26 countries, the report says.
Despite the advances, the financial inclusion of Mexico’s tortilla makers is still “zero,” said Lopez Garcia, the president of the National Tortilla Council.
“The banks don’t believe in the industry,” he said.
Source: AFP
